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Spanish resale homes see boom

Prices of resale homes in Spain are rising faster than those for new-builds for the first time in a decade - boosted by the growing demand from British and other north European buyers seeking out the 'Real Spain' inland areas in preference to the booming coastal locations.

Latest house prices in Spain rose by 16.19 percent last year on average, according to the latest figures from the Spanish College of Registered Homeowners but used or second-hand homes increased by 17.35 percent while new houses or apartments went up by 14.5 percent.

Analysts said the increase in prices showed a cooling in the housing market, but it was still very healthy and they highlighted the last quarter of 2004 when prices rose by 3.5 percent on average.

New homes went up in the same period by 3.21 percent or to benchmark average price of euro 1,624 per square metre. Used or second-hand homes rose 3.8 percent or to euro 1,477 per square metre while the average across Spain was euro 1,540 per square metre.

The most expensive areas of Spain to buy a house were Madrid, where the average price psqm was euro 2,561, followed by the Basque Country at euro 2,523 psqm and Catalonia at euro 2,209.

Cheapest property can be found in Extremadura (euro 711 psqm) Castilla La Mancha (856 psqm) and Galicia (euro 997).

Member banks of the Confederación de Española de Cajas de Ahorros (CECA) are forecasting equity growth of 12% for 2005 and 2006 and their UK property partners, online specialists, Property in Spain, claim this level "is good for the market as it keeps Spain competitive in the booming second homes market, now competing with Bulgaria, Coatia and other East European locations."

Added a spokesman for the firm: "We have a growing number of registered buyers seeking only 'real' Spain inland locations and we plan to offer a further 8,000 of these over the summer, mainly in the Costa Blanca, Costa Calida and Costa Almeria."

"However, a lot of British buyers are missing out on the best buys as the Spanish are getting their viewings and offers in before them – not always the case on the coasts where domestic buyers are often priced out."

The CECA banks, who between them hold 68 percent of all mortgages in Spain, confirmed that second-hand or used homes were the most popular section of the market, adding up to 57 percent of transactions. The Spanish banks are happy to provide mortgages for resale homes at UK-style terms with interest rates almost half of those in the UK.